Jan. 24, 2002 Alaska Newspapers Inc. on Gov. Knowles proposed budget

Posted: Monday, January 28, 2002

Gov. Tony Knowles' plan to close the state's $1.2 billion fiscal gap shows how low we've sunk. Newspapers across the state have ballyhooed it, not necessarily because it will work, but because at least someone is trying.

From a practical perspective, Knowles' 2003 budget is grossly irresponsible. He proposed $400 million in new revenue, but he asks for at least $180 million in additional expenses, leaving a net gain in year one of the phase-in plan that still leaves us $1 billion short.

''That $400 million is not going to get us very far very fast,'' Rep. Eldon Mulder, R-Anchorage, rightfully said after Knowles' State of the State address. Mulder added that Knowles' expenses will actually reach almost $300 million if uncertain federal support for Medicaid and anti-terrorism measures fall through.

The little that Knowles' 2003 budget does accomplish is sound. It would raise $350 million from income taxes. Alaska and non-Alaska residents would pay 18 percent of their federal taxes to the state, a proposal that correctly taxes the rich more than the poor.

It would raise another $30 million from increased alcohol taxes, which would have the additional benefit of decreasing alcohol-related crime. It would also collect $20 million from a passenger fee on cruse ships, which currently pay no state tax while polluting our waters and air.

But the plan is woefully inadequate otherwise. Knowles calls it a three-year plan, but addresses only the first year. He leaves the final two years for other politicians to figure out once he's left office.

He doesn't call for a state sales tax, as he should, and he predictably proposed no additional taxes on the oil industry, the ''goose that laid the golden egg.''